Buying a property with partner who is a FTB but I I not

patnut

Hi all I'm trying to weigh up my options and avoid paying stamp duty if possible partner is a first time buyer but I'm not. I own a property with no mortgage but it's too small for us and our growing family.

I've listed the options that I'm aware of below without selling existing property:

1. Me and my partner buy on open market (last option)
2. Help to buy scheme which I'm sure will only be based on my partners earnings and would limit the price of property we could afford.
3. Help to buy in partners name I remortgage existing property to use as a big deposit so partner does not need to borrow as much and put property in both our names at a later date?

Any advice would be appreciated main purpose is to help partner get on to property ladder and move to a bigger home also taking advantage of her FTB status.

Thanks

AdrianC

Why are you discounting selling the existing property?
Why not just sell, buy, chain - like... normal people do?

[Deleted User]

patnut wrote: »

Hi all I'm trying to weigh up my options and avoid paying stamp duty if possible partner is a first time buyer but I'm not. I own a property with no mortgage but it's too small for us and our growing family.

I've listed the options that I'm aware of below without selling existing property:

1. Me and my partner buy on open market (last option)
2. Help to buy scheme which I'm sure will only be based on my partners earnings and would limit the price of property we could afford.
3. Help to buy in partners name I remortgage existing property to use as a big deposit so partner does not need to borrow as much and put property in both our names at a later date?

Any advice would be appreciated main purpose is to help partner get on to property ladder and move to a bigger home also taking advantage of her FTB status.

Thanks

When you say HTB are you referring to the HTB Equity Loan scheme? Any HTB EL mortgage will be limited to 4.5 times the applicant's income. You also need a mortgage of at least 25% of the purchase price so that's a maximum deposit of 75%.

Most mortgage lenders will have an issue with someone contributing towards the deposit and who will live in the property but who doesn't want to be named on the mortgage. There may still be SDLT to pay in the future if you transfer the property into joint ownership.

Although you say option 1 is the last resort the reality is that it's probably your best option.

Retired_Mortgage_Adviser

Putting the house entirely in her name doesn’t help (with reagrd to avoiding the 3% surcharge) because in the eyes of HMRC you would be a joint purchaser with what’s called a “beneficial interest” in the property. You are viewed as having a beneficial interest if you have (in HMRC’s words) “any future entitlement to capital proceeds from the sale of the property, to income or to occupy the property”.

From what I can see, your options are to either sell current property and move. Or keep the current property and pay the 3% SDLT surcharge.

As for HTB, the scheme is riddled with loopholes and you could well do the same as an MP who took the help of HTB Equity Loan to buy an additional home in his constituency by buying it in his wife's sole name.

In the past, I have helped clients release equity from property 1 (owned solely by partner 1), the cash is then gifted by partner 1 to 2, and then partner 2 uses the deposit to buy a new build using HTB in their name. It's not too difficult to get a mortgage though the choice of lenders may be limited due to the source of the deposit.

gingercordial

patnut wrote: »

3. Help to buy in partners name I remortgage existing property to use as a big deposit so partner does not need to borrow as much and put property in both our names at a later date?

Bear in mind this last option requires an immense amount of trust on your part as you are not married so not protected. What if you do this then split up before the property is put into your name? You will be left with the bigger mortgage on your property and they will have a nice free chunk of equity...

"It'll never happen!" as everyone says.

patnut

AdrianC wrote: »

Why are you discounting selling the existing property?
Why not just sell, buy, chain - like... normal people do?

My mum will still be living in the property....

AdrianC

patnut wrote: »

My mum will still be living in the property....

Well, there's a rather relevant detail that drip-drip-dripped through...

That's going to make finding a BtL mortgage on that property far more difficult to source, for starters.

Retired_Mortgage_Adviser

Depending on the circumstances of the occupancy, this will make remortgaging to release equity slightly more complicated, but by no means impossible (for a decent broker I must add!). I would consult a whole of market broker to get an idea of if and how much you might be able to release.

patnut wrote: »

My mum will still be living in the property....

Annastin

Ah, that explains how my minted ex-boss said he bought his pied-à-terre in London through help2buy.

Retired_Mortgage_Adviser wrote: »

In the past, I have helped clients release equity from property 1 (owned solely by partner 1), the cash is then gifted by partner 1 to 2, and then partner 2 uses the deposit to buy a new build using HTB in their name. It's not too difficult to get a mortgage though the choice of lenders may be limited due to the source of the deposit.